I'm trying to develop an educational product. But the product is now in a stage that we need a good lump sum of money. We thought about diferent types of fund raising like: Investors, Loans, Partnership with other companies.
We will like to now what kind of negotiations we could do with Investors or with a Company?
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How to Raise Capital for a New Business ? – 04-12-2006,11:49 AM
- Join Date
- Mar 2006
- Puerto Rico
Re: How to Raise Capital for a New Business ? – 04-24-2006,08:51 AM
- Join Date
- Mar 2006
I know this is a bit late but a couple of thoughts.
Before talking to any potential funder ensure you establish a non-disclosure agreement. The product I presume is novel and has an Interlectual property value. If you have nor protection, patent, copywrite, etc you are very vulnerable.
Unless your idea has massive potential (honestly assessed) it is unlikely you will attract business angel funding.
The best option is friends and family, bank loan, (security?) or a company already in the market you wish to target, who would benefit from an additional product.
angel investors, crowdfunding (Kickstarter) peer to peer lenders, maybe a loan? There are a ton of things you can do to raise funds. Even church bake sales can help. Social media can be a powerful platform for fund raising...and you can use Paypal to receive donations. All of these will work. You just have to get the word out.
You would need to be able to run some sort of soft launch or pilot launch as proof to your investors how you plan to actually manage their money and business later on. Only sourcing for funds without this will not yield you good amount of investments. You need to be able to build a considerable level of trust first, as well as overall confidence in the viability of the business.
My own suggestion would be to find a cheap way to advertise your product. For example, I own a health and fitness website, but I have plans of opening a gym in the next year or two. Having the website will allow me to drive publicity to the gym.
Although I realize your situation is much different from mine. Depending on what age group your product targets, I would recommend approaching some schools. Failing that, there is always kickstarter.
Jubvman, you are right. You can begin advertising your business well before you even get your first block laid through online options. It is a great way to drum up interest and ensures that you will have customers at your door as soon as you open. Good for you!
I would definitely look into Kickstarter or another similar program. You might be surprised by how much money you can get for your project. A lot of companies have been launching solely from funds from Kickstarter. One company that I know of surpassed its goal by 800 percent because so many people believed in it.
I you already have a prototype of your product, you could try any of the crowdfunding websites. Kickstarter requires you to already have a working prototype so this is the minimum you need. It would never hurt to put it on Kickstarter. You might even attract a lot of attention from the press.
Nowadays, crowdfunding is looking good for getting any kind of investment from the people and I think this is the good approach for small business owners as well.
There s are several sources of funds for businesses. Savings are the number one methods used to raise money for a business. Secondly one can get loans from banks that have the least return rates. The best loans are the governments loans because their return rate is very low. Borrowing from friends and family can also play a role in starting the business.